Reliance Communications Ltd on Wednesday raised USD 804 million by selling shares, people involved in the process said, in what is the single biggest equity issue since the pro-business Narendra Modi-led government took office.

The proceeds will help the company's third-largest mobile phone operator by customers cut its debt, said the people, who declined to be named as they were not authorised to speak to the media before a public announcement.

A Reliance Communications spokesman declined to comment.

The company's share sale is likely to be followed by a raft of equity sales by Indian companies in the coming months on the back of growing demand for equities after a landslide election victory last month for India’s new Prime Minister Modi.

Reliance Communications, headed by billionaire Anil Ambani, had net debt of 401.78 billion rupees (USD 6.7 billion) as of end-March. That was more than five times its operating profit, making it the most-leveraged among listed Indian carriers.

"There is a need for corporate India to deleverage balance sheets for growth. There is no other choice. Share sale momentum will continue," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.

"Foreign investors continue to lap up Indian issues on economy and Modi-driven confidence," he added.

An economic downturn and sluggish corporate earnings growth in Asia's third-largest economy have deterred equity deals in the past year.

Modi-led Bharatiya Janata Party won India's first outright parliamentary majority in three decades, spurring hopes of a revival in an economy that is witnessing its longest spell of under-five-percent growth since the late 1980s.

Reliance Communications got total bids of about 120 billion rupees but has decided to retain about 60 billion rupees worth of bids out of which 48 billion rupees (USD 804.02 million) was via shares sold to institutional investors, sources said.

The company's founders also bought shares worth 13 billion rupees, they said. The company had launched the share sale worth up to USD 500 million on Tuesday.

Reliance Communications shares were trading down 2.5 percent at 148.40 rupees at 0505GMT, while the main Mumbai market index was trading flat.

Reliance Communications Ltd on Wednesday raised USD 804 million by selling shares, people involved in the process said, in what is the single biggest equity issue since the pro-business Narendra Modi-led government took office.

The proceeds will help the company's third-largest mobile phone operator by customers cut its debt, said the people, who declined to be named as they were not authorised to speak to the media before a public announcement.

A Reliance Communications spokesman declined to comment.

The company's share sale is likely to be followed by a raft of equity sales by Indian companies in the coming months on the back of growing demand for equities after a landslide election victory last month for India’s new Prime Minister Modi.

Reliance Communications, headed by billionaire Anil Ambani, had net debt of 401.78 billion rupees (USD 6.7 billion) as of end-March. That was more than five times its operating profit, making it the most-leveraged among listed Indian carriers.

"There is a need for corporate India to deleverage balance sheets for growth. There is no other choice. Share sale momentum will continue," said Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance.

"Foreign investors continue to lap up Indian issues on economy and Modi-driven confidence," he added.

An economic downturn and sluggish corporate earnings growth in Asia's third-largest economy have deterred equity deals in the past year.

Modi-led Bharatiya Janata Party won India's first outright parliamentary majority in three decades, spurring hopes of a revival in an economy that is witnessing its longest spell of under-five-percent growth since the late 1980s.

Reliance Communications got total bids of about 120 billion rupees but has decided to retain about 60 billion rupees worth of bids out of which 48 billion rupees (USD 804.02 million) was via shares sold to institutional investors, sources said.

The company's founders also bought shares worth 13 billion rupees, they said. The company had launched the share sale worth up to USD 500 million on Tuesday.

Reliance Communications shares were trading down 2.5 percent at 148.40 rupees at 0505GMT, while the main Mumbai market indexwas trading flat.